A&O Shearman lawyers ordered to sacrifice billable hours to build AI tools

A&O Shearman, a leading legal firm, has pledged to dedicate over 5% of its annual revenue towards developing AI tools over the next five years. The investment amounts to $1.1 billion ($816 million) over the five-year period, reflecting a significant shift in how legal work is designed and delivered to clients, as well as how the firm trains its employees. Each practice within the firm is expected to allocate at least 3% of its billable hours to building AI tools relevant to its area of law.

David Wakeling, the firm's global head of AI, emphasized that the AI strategy is "open and transparent," with each AI solution designed in collaboration with the client. The firm aims to initiate more client conversations about how the work, relationship, and economics can evolve with AI integration. This commitment follows A&O Shearman's early adoption of legal AI, which began as one of Harvey AI's first customers.

The firm's global managing partner, Hervé Ekué, highlighted the significance of the investment in shaping the firm's future direction over the next decade. Ekué noted that AI enables the law firm to bring an enhanced skillset to clients, tackling complex legal work on a global scale in ways previously unattainable. By combining exceptional legal judgment with speed and scale, the firm intends to be a leader in the industry, accelerating its competitive edge.

In a parallel development, fellow magic circle competitor Freshfields recently announced a multi-year partnership with AI giant Anthropic. This collaboration grants Freshfields access to Anthropic's latest AI models and facilitates co-design of next-generation offerings. Within six weeks of implementation, Freshfields reported a 500% increase in usage of Anthropic's Claude models across its global workforce of 5,700 users spread across 33 offices.